Russia is one of the largest hotel markets in Central and Eastern Europe. In total, nearly 53 million people stayed at hotels and similar accommodation establishments in the country in 2021. In recent years, Russian hotels have seen a decrease in foreign guests due to the COVID-19 pandemic and the war in Ukraine. At the same time, the number of Russians traveling abroad has also declined, benefitting the domestic hospitality market. In 2021, the hotel industry revenue in Russia was above pre-pandemic levels.
Furthermore, changes took place in the online accommodation booking industry. The Dutch platform Booking.com and the German company Trivago exited Russia in March 2022. Booking.com occupied an estimated 80 percent of the market as of 2021. Therefore, customers increasingly booked accommodation directly on websites of hotels as well as on domestic online travel platforms, such as Ostrovok, Bronevik, and Yandex.Travel. According to surveys conducted between April 2021 and March 2022, 13 percent of Russians who booked accommodation online used Yandex.Travel.
Leading hotel regions in Russia
The Krasnodar Krai accounted for the largest revenue of hotels in Russia, at around 36 percent in 2021. The region was home to Sochi, popular for beach vacations in the summer and ski tourism in the winter, and other resorts on the Black Sea. Generally, the Southern Federal District had the most hotels in the country, at nearly 8.7 thousand. It was followed by the Central Federal District, where Moscow and Saint Petersburg were the leading hotel locations for both business and leisure travel. When asked in which cities they would prefer to open a chain hotel, most operators in Russia named these two cities.Impact of the war in Ukraine on the Russian hotel market
After the Russian invasion of Ukraine in February 2022, major foreign hotel operators like the Finnish S-Group and the U.S. Marriott International, suspended their operations in Russia. The U.S. group Hyatt Hotels stopped operating the hotel Hyatt Regency Moscow Petrovsky Park, while Intercontinental Hotels Group (IHG) stopped cooperating with the domestic Cosmos Hotel Group. In comparison, the French Accor and the U.S. Radisson Hotel Group suspended new investment in the country, but they continued operating their hotels. These two companies led the ranking of foreign hotel operators in Russia by number of establishments in 2021. Russia was Accor's second-leading market in CEE.Furthermore, changes took place in the online accommodation booking industry. The Dutch platform Booking.com and the German company Trivago exited Russia in March 2022. Booking.com occupied an estimated 80 percent of the market as of 2021. Therefore, customers increasingly booked accommodation directly on websites of hotels as well as on domestic online travel platforms, such as Ostrovok, Bronevik, and Yandex.Travel. According to surveys conducted between April 2021 and March 2022, 13 percent of Russians who booked accommodation online used Yandex.Travel.
